Intrinsic value of Starbucks - SBUX

Previous Close

$54.57

  Intrinsic Value

$50.67

stock screener

  Rating & Target

hold

-7%

Previous close

$54.57

 
Intrinsic value

$50.67

 
Up/down potential

-7%

 
Rating

hold

We calculate the intrinsic value of SBUX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 75.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.50
  10.85
  10.27
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.20
  6.08
  5.98
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
Revenue, $m
  24,961
  27,670
  30,510
  33,481
  36,583
  39,816
  43,182
  46,684
  50,325
  54,108
  58,040
  62,126
  66,372
  70,788
  75,380
  80,157
  85,131
  90,310
  95,707
  101,332
  107,200
  113,322
  119,714
  126,389
  133,364
  140,654
  148,278
  156,252
  164,596
  173,330
Variable operating expenses, $m
  20,421
  22,615
  24,916
  27,323
  29,836
  32,455
  35,182
  38,019
  40,969
  44,034
  47,021
  50,331
  53,772
  57,349
  61,069
  64,940
  68,969
  73,165
  77,537
  82,095
  86,848
  91,808
  96,986
  102,394
  108,045
  113,951
  120,128
  126,588
  133,348
  140,424
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  20,421
  22,615
  24,916
  27,323
  29,836
  32,455
  35,182
  38,019
  40,969
  44,034
  47,021
  50,331
  53,772
  57,349
  61,069
  64,940
  68,969
  73,165
  77,537
  82,095
  86,848
  91,808
  96,986
  102,394
  108,045
  113,951
  120,128
  126,588
  133,348
  140,424
Operating income, $m
  4,541
  5,055
  5,594
  6,158
  6,747
  7,361
  8,000
  8,665
  9,356
  10,074
  11,019
  11,794
  12,601
  13,439
  14,311
  15,218
  16,162
  17,145
  18,170
  19,238
  20,352
  21,514
  22,727
  23,995
  25,319
  26,703
  28,150
  29,664
  31,248
  32,906
EBITDA, $m
  5,745
  6,368
  7,022
  7,706
  8,420
  9,164
  9,939
  10,745
  11,583
  12,453
  13,358
  14,299
  15,276
  16,292
  17,349
  18,449
  19,594
  20,786
  22,028
  23,323
  24,673
  26,082
  27,553
  29,090
  30,695
  32,373
  34,128
  35,963
  37,883
  39,894
Interest expense (income), $m
  97
  212
  268
  326
  388
  452
  518
  588
  660
  736
  814
  896
  980
  1,068
  1,160
  1,255
  1,353
  1,456
  1,563
  1,675
  1,791
  1,912
  2,038
  2,170
  2,308
  2,451
  2,601
  2,758
  2,922
  3,094
  3,274
Earnings before tax, $m
  4,328
  4,787
  5,268
  5,771
  6,296
  6,843
  7,412
  8,004
  8,620
  9,260
  10,123
  10,814
  11,533
  12,279
  13,056
  13,864
  14,706
  15,582
  16,495
  17,447
  18,440
  19,476
  20,557
  21,687
  22,867
  24,101
  25,392
  26,742
  28,154
  29,633
Tax expense, $m
  1,169
  1,292
  1,422
  1,558
  1,700
  1,848
  2,001
  2,161
  2,327
  2,500
  2,733
  2,920
  3,114
  3,315
  3,525
  3,743
  3,971
  4,207
  4,454
  4,711
  4,979
  5,258
  5,550
  5,855
  6,174
  6,507
  6,856
  7,220
  7,602
  8,001
Net income, $m
  3,160
  3,494
  3,845
  4,213
  4,596
  4,995
  5,411
  5,843
  6,293
  6,760
  7,390
  7,894
  8,419
  8,964
  9,531
  10,121
  10,735
  11,375
  12,041
  12,736
  13,461
  14,217
  15,007
  15,832
  16,693
  17,594
  18,536
  19,521
  20,552
  21,632

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  16,021
  17,760
  19,583
  21,490
  23,481
  25,556
  27,717
  29,964
  32,301
  34,729
  37,253
  39,875
  42,601
  45,435
  48,382
  51,449
  54,641
  57,965
  61,429
  65,040
  68,806
  72,736
  76,838
  81,123
  85,599
  90,279
  95,172
  100,290
  105,646
  111,252
Adjusted assets (=assets-cash), $m
  16,021
  17,760
  19,583
  21,490
  23,481
  25,556
  27,717
  29,964
  32,301
  34,729
  37,253
  39,875
  42,601
  45,435
  48,382
  51,449
  54,641
  57,965
  61,429
  65,040
  68,806
  72,736
  76,838
  81,123
  85,599
  90,279
  95,172
  100,290
  105,646
  111,252
Revenue / Adjusted assets
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
  1.558
Average production assets, $m
  6,440
  7,139
  7,872
  8,638
  9,438
  10,273
  11,141
  12,044
  12,984
  13,960
  14,974
  16,028
  17,124
  18,263
  19,448
  20,681
  21,964
  23,300
  24,692
  26,144
  27,658
  29,237
  30,886
  32,608
  34,408
  36,289
  38,256
  40,313
  42,466
  44,719
Working capital, $m
  -1,822
  -2,020
  -2,227
  -2,444
  -2,671
  -2,907
  -3,152
  -3,408
  -3,674
  -3,950
  -4,237
  -4,535
  -4,845
  -5,167
  -5,503
  -5,851
  -6,215
  -6,593
  -6,987
  -7,397
  -7,826
  -8,273
  -8,739
  -9,226
  -9,736
  -10,268
  -10,824
  -11,406
  -12,016
  -12,653
Total debt, $m
  4,966
  6,046
  7,178
  8,362
  9,599
  10,887
  12,229
  13,625
  15,076
  16,584
  18,151
  19,780
  21,472
  23,232
  25,063
  26,967
  28,949
  31,014
  33,165
  35,407
  37,746
  40,186
  42,734
  45,394
  48,174
  51,080
  54,119
  57,297
  60,623
  64,104
Total liabilities, $m
  9,949
  11,029
  12,161
  13,345
  14,582
  15,870
  17,212
  18,608
  20,059
  21,567
  23,134
  24,763
  26,455
  28,215
  30,045
  31,950
  33,932
  35,997
  38,148
  40,390
  42,729
  45,169
  47,716
  50,377
  53,157
  56,063
  59,102
  62,280
  65,606
  69,087
Total equity, $m
  6,072
  6,731
  7,422
  8,145
  8,899
  9,686
  10,505
  11,356
  12,242
  13,162
  14,119
  15,113
  16,146
  17,220
  18,337
  19,499
  20,709
  21,969
  23,282
  24,650
  26,077
  27,567
  29,122
  30,745
  32,442
  34,216
  36,070
  38,010
  40,040
  42,164
Total liabilities and equity, $m
  16,021
  17,760
  19,583
  21,490
  23,481
  25,556
  27,717
  29,964
  32,301
  34,729
  37,253
  39,876
  42,601
  45,435
  48,382
  51,449
  54,641
  57,966
  61,430
  65,040
  68,806
  72,736
  76,838
  81,122
  85,599
  90,279
  95,172
  100,290
  105,646
  111,251
Debt-to-equity ratio
  0.820
  0.900
  0.970
  1.030
  1.080
  1.120
  1.160
  1.200
  1.230
  1.260
  1.290
  1.310
  1.330
  1.350
  1.370
  1.380
  1.400
  1.410
  1.420
  1.440
  1.450
  1.460
  1.470
  1.480
  1.480
  1.490
  1.500
  1.510
  1.510
  1.520
Adjusted equity ratio
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379
  0.379

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,160
  3,494
  3,845
  4,213
  4,596
  4,995
  5,411
  5,843
  6,293
  6,760
  7,390
  7,894
  8,419
  8,964
  9,531
  10,121
  10,735
  11,375
  12,041
  12,736
  13,461
  14,217
  15,007
  15,832
  16,693
  17,594
  18,536
  19,521
  20,552
  21,632
Depreciation, amort., depletion, $m
  1,204
  1,313
  1,428
  1,548
  1,673
  1,803
  1,939
  2,080
  2,227
  2,379
  2,340
  2,504
  2,676
  2,854
  3,039
  3,231
  3,432
  3,641
  3,858
  4,085
  4,321
  4,568
  4,826
  5,095
  5,376
  5,670
  5,977
  6,299
  6,635
  6,987
Funds from operations, $m
  4,364
  4,808
  5,273
  5,760
  6,269
  6,798
  7,350
  7,923
  8,519
  9,139
  9,730
  10,399
  11,094
  11,818
  12,570
  13,352
  14,167
  15,015
  15,899
  16,821
  17,782
  18,786
  19,833
  20,927
  22,069
  23,264
  24,513
  25,820
  27,188
  28,619
Change in working capital, $m
  -188
  -198
  -207
  -217
  -226
  -236
  -246
  -256
  -266
  -276
  -287
  -298
  -310
  -322
  -335
  -349
  -363
  -378
  -394
  -411
  -428
  -447
  -467
  -487
  -509
  -532
  -557
  -582
  -609
  -638
Cash from operations, $m
  4,552
  5,006
  5,481
  5,977
  6,495
  7,034
  7,595
  8,179
  8,785
  9,415
  10,017
  10,697
  11,404
  12,140
  12,905
  13,701
  14,530
  15,393
  16,293
  17,232
  18,211
  19,232
  20,299
  21,414
  22,579
  23,796
  25,070
  26,402
  27,797
  29,257
Maintenance CAPEX, $m
  -903
  -1,006
  -1,115
  -1,230
  -1,350
  -1,475
  -1,605
  -1,741
  -1,882
  -2,029
  -2,181
  -2,340
  -2,504
  -2,676
  -2,854
  -3,039
  -3,231
  -3,432
  -3,641
  -3,858
  -4,085
  -4,321
  -4,568
  -4,826
  -5,095
  -5,376
  -5,670
  -5,977
  -6,299
  -6,635
New CAPEX, $m
  -659
  -699
  -733
  -767
  -800
  -834
  -868
  -903
  -939
  -976
  -1,014
  -1,054
  -1,096
  -1,139
  -1,185
  -1,233
  -1,283
  -1,336
  -1,392
  -1,451
  -1,514
  -1,580
  -1,649
  -1,722
  -1,799
  -1,881
  -1,967
  -2,057
  -2,153
  -2,253
Cash from investing activities, $m
  -1,562
  -1,705
  -1,848
  -1,997
  -2,150
  -2,309
  -2,473
  -2,644
  -2,821
  -3,005
  -3,195
  -3,394
  -3,600
  -3,815
  -4,039
  -4,272
  -4,514
  -4,768
  -5,033
  -5,309
  -5,599
  -5,901
  -6,217
  -6,548
  -6,894
  -7,257
  -7,637
  -8,034
  -8,452
  -8,888
Free cash flow, $m
  2,990
  3,301
  3,633
  3,981
  4,345
  4,725
  5,122
  5,535
  5,964
  6,411
  6,821
  7,303
  7,804
  8,325
  8,867
  9,430
  10,016
  10,625
  11,260
  11,922
  12,612
  13,331
  14,082
  14,866
  15,684
  16,539
  17,433
  18,368
  19,345
  20,368
Issuance/(repayment) of debt, $m
  1,034
  1,079
  1,132
  1,184
  1,236
  1,289
  1,342
  1,396
  1,451
  1,508
  1,567
  1,629
  1,693
  1,760
  1,830
  1,904
  1,982
  2,064
  2,151
  2,242
  2,339
  2,440
  2,548
  2,661
  2,780
  2,906
  3,039
  3,178
  3,326
  3,481
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,034
  1,079
  1,132
  1,184
  1,236
  1,289
  1,342
  1,396
  1,451
  1,508
  1,567
  1,629
  1,693
  1,760
  1,830
  1,904
  1,982
  2,064
  2,151
  2,242
  2,339
  2,440
  2,548
  2,661
  2,780
  2,906
  3,039
  3,178
  3,326
  3,481
Total cash flow (excl. dividends), $m
  4,023
  4,380
  4,765
  5,165
  5,581
  6,014
  6,464
  6,930
  7,415
  7,919
  8,388
  8,932
  9,497
  10,085
  10,697
  11,334
  11,998
  12,690
  13,411
  14,165
  14,951
  15,772
  16,630
  17,526
  18,464
  19,445
  20,472
  21,546
  22,671
  23,849
Retained Cash Flow (-), $m
  -622
  -659
  -691
  -723
  -755
  -787
  -819
  -852
  -886
  -920
  -956
  -994
  -1,033
  -1,074
  -1,117
  -1,162
  -1,210
  -1,260
  -1,313
  -1,369
  -1,427
  -1,489
  -1,555
  -1,624
  -1,697
  -1,773
  -1,854
  -1,940
  -2,030
  -2,125
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  3,401
  3,721
  4,074
  4,442
  4,827
  5,228
  5,645
  6,079
  6,530
  6,998
  7,432
  7,938
  8,464
  9,011
  9,580
  10,172
  10,788
  11,430
  12,099
  12,796
  13,523
  14,282
  15,075
  15,903
  16,767
  17,672
  18,617
  19,606
  20,641
  21,725
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  3,261
  3,407
  3,545
  3,658
  3,741
  3,794
  3,813
  3,799
  3,751
  3,669
  3,529
  3,387
  3,218
  3,025
  2,812
  2,585
  2,347
  2,105
  1,863
  1,626
  1,399
  1,185
  988
  810
  652
  516
  400
  303
  225
  164
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Starbucks Corporation (Starbucks) is a roaster, marketer and retailer of coffee. As of October 2, 2016, the Company operated in 75 countries. The Company operates through four segments: Americas, which is inclusive of the United States, Canada, and Latin America; China/Asia Pacific (CAP); Europe, Middle East, and Africa (EMEA), and Channel Development. The Company's Americas, CAP, and EMEA segments include both company-operated and licensed stores. Its Channel Development segment includes roasted whole bean and ground coffees, Tazo teas, Starbucks- and Tazo-branded single-serve products, a range of ready-to-drink beverages, such as Frappuccino, Starbucks Doubleshot and Starbucks Refreshers beverages and other branded products sold across the world through channels, such as grocery stores, warehouse clubs, specialty retailers, convenience stores and the United States foodservice accounts.

FINANCIAL RATIOS  of  Starbucks (SBUX)

Valuation Ratios
P/E Ratio 27.1
Price to Sales 3.5
Price to Book 14.3
Price to Tangible Book
Price to Cash Flow 18.7
Price to Free Cash Flow 29.4
Growth Rates
Sales Growth Rate 5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5.5%
Cap. Spend. - 3 Yr. Gr. Rate 5.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 72.2%
Total Debt to Equity 72.2%
Interest Coverage 46
Management Effectiveness
Return On Assets 20.6%
Ret/ On Assets - 3 Yr. Avg. 22.1%
Return On Total Capital 30.6%
Ret/ On T. Cap. - 3 Yr. Avg. 32.7%
Return On Equity 50.9%
Return On Equity - 3 Yr. Avg. 49.6%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 59.6%
Gross Margin - 3 Yr. Avg. 59.7%
EBITDA Margin 24.5%
EBITDA Margin - 3 Yr. Avg. 25%
Operating Margin 18.5%
Oper. Margin - 3 Yr. Avg. 19.5%
Pre-Tax Margin 19.3%
Pre-Tax Margin - 3 Yr. Avg. 19.8%
Net Profit Margin 12.9%
Net Profit Margin - 3 Yr. Avg. 13.5%
Effective Tax Rate 33.2%
Eff/ Tax Rate - 3 Yr. Avg. 31.8%
Payout Ratio 50.3%

SBUX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SBUX stock intrinsic value calculation we used $22386.8 million for the last fiscal year's total revenue generated by Starbucks. The default revenue input number comes from 0001 income statement of Starbucks. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SBUX stock valuation model: a) initial revenue growth rate of 11.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for SBUX is calculated based on our internal credit rating of Starbucks, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Starbucks.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SBUX stock the variable cost ratio is equal to 81.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for SBUX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Starbucks.

Corporate tax rate of 27% is the nominal tax rate for Starbucks. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SBUX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SBUX are equal to 25.8%.

Life of production assets of 6.4 years is the average useful life of capital assets used in Starbucks operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SBUX is equal to -7.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5450.1 million for Starbucks - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1380 million for Starbucks is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Starbucks at the current share price and the inputted number of shares is $75.3 billion.

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COMPANY NEWS

▶ Why Coke Just Dropped $5B on a Coffee Company   [Sep-18-18 04:05PM  Motley Fool]
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▶ Starbucks Has Not Been Impacted by Trade Tensions, CEO Says   [Sep-13-18 04:49PM  Bloomberg Video]
▶ Starbucks is testing Uber Eats delivery options, but not in Seattle   [04:08PM  American City Business Journals]
▶ The Afternoon Rundown: September 13, 2018   [04:01PM  CNBC Videos]
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▶ AP Top Extended Financial Headlines at 11:47 p.m. EDT   [Sep-06-18 11:47PM  Associated Press]
▶ Starbucks' 1st Italian store has stiff competition   [10:59AM  Associated Press Videos]
▶ [$$] After 25,000 Stores in 78 Countries, Starbucks Turns to Italy   [Sep-05-18 08:05PM  The Wall Street Journal]
▶ Google Tax   [09:44AM  Investopedia]
▶ A look at companies embroiled in recent political debates   [Sep-04-18 06:37PM  Associated Press]
▶ Starbucks' third Reserve Roastery opens in Milan on Thursday   [04:53PM  American City Business Journals]
▶ Market Open: August 31, 2018   [12:56PM  CNBC Videos]
▶ The Brief, August 31   [11:20AM  Barrons.com]
▶ Coke Craves Coffee, Buys Coffee Chain   [10:43AM  Bloomberg]
▶ [$$] FirstFT: Todays top stories   [07:13AM  Financial Times]
▶ 3 High-Yield Stocks Still Worth Buying   [06:00AM  Motley Fool]
▶ 3 Best Coffee Stocks for 2018   [06:00AM  Investopedia]
▶ [$$] Starbucks' Frappuccino Gets a Sugar Makeover   [05:57AM  The Wall Street Journal]
▶ Are Insiders Buying the Popular Stocks?   [Aug-29-18 11:14AM  Zacks]
▶ Confirmed: Starbucks bringing 500 jobs to Atlanta   [09:37AM  American City Business Journals]
▶ Nestlé closes $7.15B deal to sell Starbucks products   [08:55AM  American City Business Journals]

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